Paid Sick Leave Laws Continue to Trouble Employers

One topic that continues to cause employers concerns involves California’s mandatory paid sick leave law, which took effect last year and required employers to provide paid sick leave (PSL) to their employees beginning July 1, 2015.

With the July 1, 2015 date on the horizon, most employers spent the beginning half of last year focused on making sure they had in place a sick leave or paid time off (PTO) policy that provided time off to their employees. Employers were either
creating new and compliant policies or examining existing ones to ensure no changes were required.

Today, employers are looking back at their policies, wondering whether those policies are best suited for their workplace. More importantly, many employers are realizing that the law requires much more than simply providing days off to an employee.

As a result, some employers are contemplating adding another paid sick leave policy as a means of not only complying with the new law, but also allowing the employer to continue providing more than the minimum amount of sick leave time, but without the additional strings and restrictions that come with California’s sick leave law.

Many employers have misconceptions or misunderstandings about the law’s minimum requirements and how the law’s protections apply to more generous sick leave and PTO policies, as well as how to control misuse of paid sick leave. More specifically, employers want to know: at what point can an employer ask for a doctor’s note as a condition of taking or returning from paid sick leave?

Here are a few key points to consider as employers continue to comply with the law.

California’s paid sick leave law provides minimum requirements that employers may either follow to the letter of the law or expand upon — an example being a policy that allows an employee to use and accrue more than the statutory minimum. Whether an employer wants to offer only the minimum amount or wishes to offer more, the entire paid sick leave or PTO policy must comply with all aspects of the law.

Recordkeeping requirements apply to all time contained in a sick leave plan. The law requires employers to keep records documenting the hours worked and the paid sick days accrued and used by the employee for at least three years. This requirement applies to all sick leave time provided — including time that is beyond the statutory minimum if the plan goes beyond the statute’s minimum requirements.

California’s paid sick leave law also specifies when and how an employee is paid for taking a “sick day.” The “sick day” must be paid no later than the payday of the next regular payroll period after the sick leave was taken. The method of calculating the pay depends upon whether the employee is exempt or nonexempt. For an exempt employee, paid sick time is calculated in the same manner as wages are calculated for other forms of paid leave time.

For nonexempt employees, paid sick leave is calculated either in the same manner as the “regular rate of pay” for the workweek in which the employee uses paid sick time or by “dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay period of the prior 90 days of employment.”

Employers should note paying a nonexempt employee for a sick day involves either calculating the employee’s “regular rate of pay” or performing a 90-day look back. These two methods are not the same as the employee’s “base rate.”

When can we ask an employee to provide us with a doctor’s note for taking a sick day? Many employers maintained policies that required doctor’s notes after three days of unexcused absences. Once sick leave became mandatory, many employers still tried to enforce these policies for a variety of reasons, one being to ensure employees weren’t “faking it” and otherwise taking advantage of a new paid leave.

Unless a medical certification is required pursuant to another leave law, no provision in the paid sick leave law specifically allows (or prohibits) an employer to ask for a doctor’s note as a condition of taking or returning from being sick. Instead, the law states that an employee must be able to take a sick day when a verbal or written request for the time off is communicated to the employer.

If the need for leave is foreseeable, the employee must provide reasonable advance notice. If the need is not foreseeable, then notice must be provided as “soon as practicable.”

Labor Code Section 247.5 also provides that an employer is not obliged to inquire into or record the purposes for which an employee uses sick leave.

In addition, an employer is prohibited from denying an employee the right to use accrued sick days. The employer also is prohibited from discharging or threatening to discharge, demote, suspend, or in any manner discriminate against an employee for using or attempting to use accrued sick days.

Employers continue to grapple with the paid sick leave laws and we advise they discuss these new policies with counsel in order to ensure compliance with California law.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.